"When they said, 'Your baby has spina bifida,' we were obviously thinking worst case... We were pretty devastated," Nathan says.
The couple has come to Vanderbilt University Medical Center in Nashville, Tenn., to embark on an experimental surgery that could change the course of their daughter's life before she's even born.
"It gives her a chance," Lori says. "We don't have any large expectations -- we have large hopes."
Spina bifida occurs early in the pregnancy when the spine of a developing fetus doesn't close properly, leaving the spinal chord and nerves exposed and damaged. That often results in paralysis below the waist. Half of all children born with this birth defect will eventually wind up in wheelchairs, reports CBS News Correspondent John Roberts.
Using new 3-D ultrasound technology, Dr. Joseph Bruner, Director of Fetal Diagnosis and Therapy, locates exactly where the problem is.
"The lesion starts just below the level of the last rib in the middle of the baby's back and it runs down into the tailbone" Dr. Bruner says. "This is a worse than average lesion."
And that means trouble on another front. The opening in the baby's spine doesn't allow fluid in her head to circulate properly, resulting in a condition called hydrocephalus, which can cause brain damage.
To stop the ongoing damage, Lori will undergo a delicate and dangerous operation.
"The worst possible outcome is that the baby could be delivered so early that it could be severely injured or perhaps even die," Dr. Bruner says.
It's an extraordinary procedure. The surgical team is actually operating on the fetus, while she is still in her mother's uterus. They work quickly to repair and close the opening in her spine.
While corrective surgery after birth can limit the most severe consequences of spina bifida -- death and mental retardation -- it cannot repair the damage done to the spinal chord. So until this procedure was pioneered, parents had a tough choice: face the prospect of raising a child with multiple disabilities or terminate the pregnancy.
In 42 surgeries performed by Dr. Bruner's team so far, early results are encouraging.
"The incidence of hydrocephalus has been decreased by about two-thirds. That's an incredible result," Dr. Bruner says.
Because the technique is so new, it's still unclear how many of the children will be able to walk.
But if the steps of toddler Nicholas Garcia are any indication, there is reason for optimism. Nicholas was one of the first babies to have this fetal surgery.
"He's like a normal child," says Joyce Garcia, Nicholas' mother. "Whoever sees Nicholas and doesn't know that he has spina bifida, well, that person will never know he has spina bifida."
Nicholas is a symbol of hope for Loi and Nathan Smith who are still awaiting the birth of their daughter.
Whatever the outcome of the surgery, the Smiths are parents who don't expect a complete cure, but will always consider their daughter a miracle baby.
Reported By John Roberts